The speculation of recent weeks in the plastics production sector as to the extent of the financial difficulties at the German-Indian AKC group appears to have reached its logical conclusion. The question as to whether or not AKC is actually bankrupt has not yet been answered satisfactorily. But one thing is clear: the group, led by its flagship Kunstoplast-Chemie GmbH (An den Drei Hasen 37, D-61440 Oberursel), is in dire financial straits. As a spokesperson confirmed to PIE's sister publication, KUNSTSTOFF INFORMATION, liabilities have now mounted to DM 200-400m.

Meanwhile, it is "business as usual" in Oberursel, although the group acknowledges it has become more difficult to keep machines running since the banks blocked its accounts at the beginning of March. Kunstoplast has equity capital of DM 50m. The AKC group reported consolidated German sales of DM 800m for 1992. Worldwide sales totalled DM 2bn .

Plastics industry sources suggest that the spectacular insolvency at AKC is not due to the poor economy for plastics; on the contrary, the crisis appears to be "homemade" and has been in the making for around two years. In 1992/93, the banks raised protest when they got wind of the extensive real estate and company acquisition deals of AKC founder and main shareholder Ashok Chauhan in eastern Germany. Berlin-based Treuhandanstalt, the privatisation agency for the former German Democratic Republic's state-owned enterprises, also lost confidence in Chauhan and, in the case of six former GDR companies the Indian businessman with a degree in chemistry was involved with, either tried to reclaim them or declined to award him a final title to the property. Increasingly wary of doing business with Chauhan, the banks last month finally cut all credit lines and blocked his accounts.

Chauhan's search for fresh funds has borne little fruit thus far. Formosa Plastics (Taiwan), already one of Kunstoplast's largest creditors, has declined to cough up additional funds. As Plasteurope.com went to press, it was not clear how realistic the chances are to save Kunstoplast and with it the entire AKC group. Management in Oberursel has been tight-lipped, but has hinted that matters may have taken their course. This could mean bankruptcy proceedings, possibly involving also the private fortune of the millionaire Chauhan family.

As a hedge against bankruptcy, a new company with DM 5m equity has been founded (Kunstoplast Petrochemicals GmbH), in which Ashok Chauhan is not a shareholder. Partners are his oldest son, Atul Chauhan, and his brother, Aron Chauhan, who is also managing director. Aron Chauhan has managed the group's international plastics business successfully for many years. Plans are for the new company to keep production going, in the event that Kunstoplast ceases to exist in its present form. Plasteurope.com will keep its readers on top of developments.

READER SERVICE: Company portrait brochure AKC group: PIE-No. 33243 – Supply programme Thermoplastic Materials: PIE-No. 33244 – Leaflets PVC Compounds (Plastochem GmbH, Oberursel): PIE-No. 33245 – Leaflet Plastics Machinery and Plants (Technicom GmbH, Oberursel: PIE-No. 33246 – Leaflet Machinery and Plants (Treco Engineering and Contracting GmbH, Oberursel): PIE-No. 33247.